Compulsory Licensing, Thailand, and Abbott Laboratories

Compulsory Licensing, Thailand, and Abbott Laboratories

By
David Baron
2008|Case No.P66

The Trade Related Intellectual Property Rights (TRIPS) agreement negotiated in the Uruguay Round of multilateral trade negotiations was a major victory for the brand name pharmaceutical companies. Patent life was extended to 20 years in the United States, and countries participating in the World Trade Organization (WTO) agreed to bring their national patent law into conformity with the laws in the developed countries. Article 31 of TRIPS, however, allowed for violation of a patent (compulsory licensing)—Article 31(f) stated that the country must first attempt to obtain a voluntary license under reasonable commercial terms. Pharmaceutical companies, however, typically did not license their patents, so Article 31 allowed countries to proceed in the cases of “national emergencies,” “other circumstances of extreme urgency,” or for “public non-commercial use” such as in research.

Developing countries were unhappy with TRIPS, and when the Doha Round of WTO multilateral negotiations began, those countries insisted on more flexibility in interpreting Article 31. In 2003 the General Council of the WTO allowed member countries to waive Article 31(f) under certain conditions to allow countries with no manufacturing capacity to import drugs made under a compulsory license. The Declaration stated that TRIPS should not prevent members from protecting public health and underscored “flexibilities” associated with compulsory licensing and parallel imports. In 2005 the WTO added Article 31bis to TRIPS, which allowed least developed countries to import a drug from another country for the treatment of HIV/AIDS, tuberculosis, and malaria epidemics.

In October 2006 a military coup in Thailand replaced the elected government. The military junta appointed Dr. Mongkol na Songkhla as Health Minister. He had been critical of pharmaceutical companies, and shortly after being appointed, launched a campaign to relieve the pharmaceutical burden on Thailand’s national health care plan. In January 2007 Thailand notified Abbott Laboratories that compulsory licenses would be issued for its AIDS drug Kaletra.

This case follows the response of Abbott Laboratories and the public relations imbroglio that ensued.

Learning Objective
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